EABL borrows Sh14 billion to fund capital projects

For the fiscal year that concluded in June 2023, the publicly traded brewer EABL increased its long-term debt by Sh13.8 billion. In spite of lower cash flows and a challenging operating climate, the company used the money to fund new capital expenditures.

According to the breakdown of the company’s debt movement for the year, the stock of outstanding long-term bank loans increased to Sh37.97 billion from Sh24.16 billion in the prior quarter.

Another long-term obligation is a medium-term note with a principal amount of Sh11 billion that matures in October 2026.

Current liabilities, often known as short-term debt, increased by Sh1.1 billion to Sh9.6 billion throughout the year. EABL’s overall borrowing increased from Sh43.7 billion in June 2022 to Sh58.6 billion as a result of the growth in long-term debt.

The brewer invested Sh12.9 billion in long-term investments in the year leading up to June, including expanding the capacity of its breweries in Moshi, Tanzania, and Kampala, Uganda.

screengrab EABL

The capex also went toward its ESG program and returnables, which include glass bottles and keg barrels. “We invested a further Sh12.9 billion in capital expenditure as we completed investments to support long-term growth,” EABL stated in a letter on its financials.

Similar to the Sh13 billion the company had allocated for capex in the prior fiscal year, this expenditure was partially funded by bank loans as a result of decreased operating cash flow.

According to EABL’s cash flow statement, the amount of cash it generated decreased by 26 percent, or Sh9.2 billion, to Sh26.1 billion. This decline is attributed to a variety of macroeconomic challenges, most notably inflationary pressure, which decreased consumer purchasing power and raised operating costs.


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EABL chief executive Jane Karuku

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